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Prime Minister Narendra Modi on Sunday said safeguarding of depositors money is the key and very crucial to the banks' overall prosperity.

"Banks play a big role in the prosperity of the country. And for the prosperity of the banks, it is equally important that the depositors' money is safe. If we want to save banks, then depositors have to be protected," Modi said at an event here themed 'Depositors First: Guaranteed Time-bound Deposit Insurance Payment up to Rs 5 lakh'.

During the event, Modi handed over cheques to a few depositors whose hard-earned money was stuck because of some banks going bankrupt.

"Keeping the spirit of 'Depositors First', the name given to today's event makes it even more accurate. In the last few days, more than one lakh depositors have got their money back which was stuck for years. This amount is more than Rs 1,300 crore," Modi added.

In India, insurance scheme for bank depositors was first introduced in 1960s with security of up to Rs 50,000 which was later raised to Rs 1 lakh. However, there was no deadline for returning depositors' money.

In 2020, the Centre increased the limit to Rs 5 lakh with a deadline of 90 days.

"Understanding the concern of the poor and the middle class, we have increased this limit to Rs 5 lakh," Modi said.

Modi added that 98 per cent of the total depositors are currently covered under the depositors insurance scheme and the Centre is committed to safeguard their money.